CONTRACTS AND SALES PROFESSOR GEORGE S. GEIS UNIVERSITY OF VIRGINIA SCHOOL OF LAW

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1 A. Intrductin INTRODUCTION CONTRACTS AND SALES PROFESSOR GEORGE S. GEIS UNIVERSITY OF VIRGINIA SCHOOL OF LAW The MBE emphasizes certain tpics ver thers and cvers sme grund that is rarely studied in first-year Cntracts. a. Has an enfrceable cntract been frmed? b. Has the cntract been perfrmed (r, has the perfrmance been excused)? c. What are the remedies fr breach? Always cme back t these three questins if yu get lst r cnfused. 1. What is a cntract? A cntract is just a. Lk fr an agreement plus a special legal basis fr enfrcing the prmise (e.g., bargainedfr cnsideratin). Example 1: Is this cntract? I prmise t give yu $1,000 next week. Yu say "OK I accept." The gateway issue: What universe are yu in? The law f cntracts and sales spans tw parallel universes. Universe One is the. We are in this universe whenever a cntract deals with real estate r. Example 2: cmmn law? Yu hire me t mw yur lawn. Is this cntract gverned by Universe Tw is Article 2 f the UCC. We are in this universe whenever a cntract deals with. Nte 1: The UCC gverns all parties wh enter a gds cntract, nt just merchants. Example 3: Yu agree t buy five dzen pencils frm Staples. Is this cntract gverned by cmmn law? Nte 2: The law f cntracts is almst exactly the same in bth universes, with sme key differences ften arising n the MBE.

2 Mixed Cntracts - What universe are yu in if the cntract has elements f bth services and gds? Example 4: Yu agree t purchase a ht-water heater frm Bilermaker Inc. fr $1,000. As part f the deal, Bilermaker prmises t install the ht water heater in yur hme. Is this cntract gverned by the UCC? Rule #1: The rule. Yu cannt be in tw universes at the same time, s mixed cntracts must fall int ne class r the ther. Exceptin: cntracts - If the agreement is divided int tw mini-cntracts Example 5: Yu agree t purchase a ht-water heater frm Bilermaker Inc. fr $950. As part f the deal, Bilermaker prmises t install the ht-water heater in yur hme fr an additinal $50. Is this latter installatin part f the deal gverned by the UCC? - Cmmn law nw applies. Rule #2: The rule. Des a gd r a service play a bigger rle? Example 6: Yu cmmissin the famus artist Andy Warhl t paint yur prtrait fr $1 millin. Des the UCC apply? Example 7: Yu cmmissin my mther-in-law, Mickey, t paint yur prtrait fr $10. Des the UCC apply? MAKING AN OFFER A. In General Has an enfrceable cntract been frmed? Fur big tpics within this questin: 1) Agreement (ffer and acceptance) 2) Cnsideratin (and related theries fr when yu have t keep yur prmises) 3) Defenses t frmatin (incapacity, duress, etc.) 4) Statute f Frauds If it helps, "All Cntracts Dn't Stink" B. Agreement A cntract is typically created by agreement. This can be brken dwn int the ffer and the acceptance: Offer: "Will yu g t the ftball game with me?" Themis Bar Review, LLC MBE Cntracts and Sales

3 Acceptance: "Sure" Cunterffer: "Hw abut we g skating instead?" 1. Offer An ffer is a manifestatin f a willingness t enter int an agreement (by the fferr) that creates a (in the fferee). (Think f the ffer as a caterpillar: cute and fuzzy, but fragile.) a. Creating a Legal Offer Offer and acceptance are gverned by the, which means that utward appearance f wrds and actins is what matters nt secret intentins. The key questin is whether an fferr displays an bjectively serius t be bund. Example 8: I ffer t "sell yu my Jeep Wrangler fr $5,000." But I have my fingers crssed behind my back, and in my mind I'm thinking: "Of curse I dn't mean it; n way I'll sell the Jeep t yu." If yu say "OK," d we have a cntractual agreement?. Nte 3: Watch ut fr situatins invlving anger r humr the fferr may nt be displaying a serius intent t be bund under the bjective test. Example 9: Yu see me n the side f the rad with the hd f my Jeep Wrangler pen and wires pulled ut everywhere. I kick the side f my Jeep and yell "I'd sell this stupid junker fr $5!" Yu yell back, "I ACCEPT." D we have a cntractual agreement? Expressins f pinin? Example 10: We are talking causally in the law-schl parking lt when I lean against my Jeep Wrangler and ask yu, "Hw much d yu think this ld thing is wrth?" Yu reply (generusly), "I dn't knw, maybe abut $10,000." I say "OK, I accept." D we have a cntractual agreement? An ffer must usually be directed t a specific fferee. In ther wrds, yu can't accept an ffer unless it is directed at yu. Example 11: Yu hear that there are a lt f gd deals t be had n Wall Street. S yu walk dwn thrugh the trading pit, saying "I accept I accept I accept." D yu have any cntracts with the stck traders? Nte 4: There is a limited exceptin here fr cntest ffers r reward ffers that prmise smething t anyne wh accmplishes a certain task. Example 12: I've lst my pet cat, Mnster, and I take ut a newspaper advertisement prmising $100 t anyne wh finds my cat by this Friday. Yu MBE Cntracts and Sales 2017 Themis Bar Review, LLC 3

4 see the ad, find Mnster, and cme by my huse n Thursday t cllect the reward. D we have a cntractual agreement? Hw specific must yur ffer be? Here, we have tw slightly different rules fr ur tw different universes: Cmmn law: All terms must be cvered in the agreement. This typically means parties, subject, price, and quantity. UCC: In this universe, the law is mre willing t and find a cntract, even if the agreement leaves ut sme key terms, such as price. Editr's Nte 1: Under the UCC, the nly essential term is quantity. Example 13: Beth ffers t pay Seth $50 every week t wash her car each Saturday fr the next year. Is this deal cvered by the cmmn law? Is it a valid ffer? ; it names the parties, the subject, the price, and the duratin (quantity f washes). Example 14: Beth ffers t pay Seth a "fair price" every week t wash her car fr the next year. Is this a valid ffer? Example 15: Bb ffers t buy 500 windshield-wiper blades next week frm Sue fr $5 each. Is this deal cvered by the cmmn law? Is it a valid ffer? Example 16: Bb ffers t buy 500 windshield-wiper blades next week frm Sue fr a fair price. Is this a valid ffer? Example 17: Bb ffers t buy windshield-wiper blades next week frm Sue fr a fair price. Is this a valid ffer? because there is n quantity term. Example 18: Bb ffers t buy "all the windshield wiper blades that I need fr the next 10 years" frm Sue fr a fair price. Is this a valid ffer?, as a requirements cntract. Requirements cntract: "I dn't knw hw many I need ver the next X years, but I prmise t buy all f them frm yu." Output cntract: "I dn't knw hw many I will make ver the next X years, but I prmise t sell all f them t yu." Bth requirements and utput cntracts are specific enugh under the UCC, even thugh they dn't state an exact quantity term they prvide a frmula fr calculatin. A valid ffer must give the pwer f the acceptance t the ther side (i.e., the fferee can simply say "I accept" and knw that he has cncluded the deal). Exam Tip 1: Here are tw cmmn fact patterns testing this cncept: Themis Bar Review, LLC MBE Cntracts and Sales

5 are preliminary cmmunicatins that still reserve a final rund f apprval with the speaker. That is, they dn't cnfer a pwer f acceptance t the ther side. Invitatins t deal are nt ffers. are usually understd as invitatins t deal ("make me an ffer fr the advertised item; I'll prbably accept"). There are sme exceptins: - Reward advertisements (see Example 12, abve) - Advertisements that are very specific and leave nthing pen t negtiatin, including hw acceptance can ccur (yu may recall the Lefkwitz fur-stle case) Example 19: I tell yu that "yu'd better decide fast if yu want t buy my huse, as I expect t have a tn f ffers next week." Yu say "I accept." Is this a cntract? Example 20: I place an advertisement in the paper prmising "t sell my 1994 Jeep Wrangler fr $5,000, first cme, first served." Yu shw up at my huse waving a check and say "I accept." Is this a cntract? TERMINATING THE OFFER AND IRREVOCABLE OFFERS A. Terminating the Offer (Squashing the Caterpillar) Lk fr ne f six recurring fact patterns n the MBE (but als beware f irrevcable ffers): 1. The fferr the ffer by express cmmunicatin t the fferee. Example 21: I ffer t sell yu my huse fr $100. A split-secnd later I yell "I revke." Is there a squashed caterpillar? Example 22: I ffer t sell yu my huse fr $1 millin. A day later, I decide that I dn't want t mve and mutter t myself in my ffice "Frget it. I revke that ffer." Is there a squashed caterpillar? N, the revcatin must be t the fferee. 2. The fferee learns that the fferr has taken an actin that is abslutely incnsistent with a cntinuing ability t cntract. This is called a revcatin. Example 23: I ffer t sell yu my huse fr $1 millin. A day later, yu are talking with Mickey and learn that she bught my huse that mrning fr $1.1 millin. Yu run t my huse waving a check and say "I accept." Is this a cntract? Example 24: I ffer t sell yu my huse fr $1 millin. A day later, yu are talking with Mickey and learn that I ffered t sell her my huse that mrning MBE Cntracts and Sales 2017 Themis Bar Review, LLC 5

6 fr $1.1 millin. Yu run t my huse waving a check and say "I accept." Is this a cntract? Example 25: I ffer t sell yu a signed Cntracts textbk fr $100. A day later, yu are talking with Mickey and learn that she bught a signed cntracts textbk frm me fr $100. Yu run t my huse waving a check and say "I accept." Is this a cntract?, because there are lts f bks available t sell. 3. The fferee the ffer. Example 26: I ffer t sell yu my Jeep fr $5,000. A split secnd later, yu yell, "NO I mean YES!" Is there a squashed caterpillar? Yes. 4. The fferee makes a Example 27: I ffer t sell yu my Jeep fr $5,000. A split secnd later, yu say "I ffer t buy it fr $4,500." I remain silent. Ten secnds later, yu say "OK, OK I'll buy it fr $5,000." Is there a cntract? the cunterffer squashes the caterpillar. Nte 5: Be careful t distinguish a cunterffer frm a mere cunter-inquiry r indecisin. Example 28: I ffer t sell yu my Jeep fr $5,000. A split secnd later, yu say "Maybe nt; I better check my bank balance." I remain silent. Ten secnds later, yu say "OK, OK I'll buy it fr $5,000." Is there a cntract? Yes. 5. The fferr (As described later, death f ne party after the cntract has been made des nt usually terminate the cntract; we're talking here abut ffers). 6. A reasnable amunt f time passes. Example 29: I ffer t sell yu 1,000 barrels f il fr $100 each. Yu remain silent, and I never revke. Five years later, when the price f il has jumped t $500, yu call me up and accept. Is there a cntract? Nte 6: Remember that even if an ffer is squashed, the fferr can always thrw ut a new ffer with the exact same terms as befre ("revival"). B. Irrevcable Offers (Caterpillar's "Pwer Shield") The fferr is nrmally free t revke at any time prir t acceptance. Example 30: I ffer t sell yu my huse fr $1 millin, and I prmise nt t revke this ffer fr ne week. Five minutes later, I say "Never mind I revke the ffer." Can yu still accept? N. An "irrevcable ffer" can arise in fur ways Themis Bar Review, LLC MBE Cntracts and Sales

7 1. Optin Example 31: I ffer t sell yu my huse fr $1 millin. Yu als pay me $100 in exchange fr a prmise that I will nt revke this ffer fr ne week. Five minutes later, I say "Never mind I revke the ffer." Can yu still accept? What if the $100 will g tward the $1 millin purchase price if yu exercise the ptin? 2. Firm Offer A merchant in the UCC universe can make a firm ffer t buy r sell gds (i.e., a binding, free ptin). A merchant is smene wh regularly deals in the type f gd at issue. In ther wrds,, r a persn wh hlds himself ut as having knwledge r skills particular t the gds at issue. Als, fr purpses f this rule, a merchant is any business persn when the transactin is cmmercial in nature. A firm ffer must be written, cntain an explicit prmise nt t revke, and be signed by the. Hw lng des it last? Either as lng as stated in the ffer r fr a reasnable time perid nt t exceed days. Example 32: I ffer t sell yu a cntracts textbk fr $100 and I prmise via a signed writing nt t revke this ffer fr ne week. Five minutes later, I say "Never mind I revke the ffer." Can yu still accept?, because Prfessr Geis is nt a merchant. Example 33: Yur law-schl bkstre ffers t sell yu a cntracts textbk fr $100 and it prmises via a signed writing nt t revke this ffer fr ne week. Five minutes later, the bkstre says "Never mind I revke the ffer." Can yu still accept? Example 34: Yur law-schl bkstre ffers t sell yu a cntracts textbk fr $100. Five minutes later, it says "Never mind I revke the ffer." Can yu still accept? Example 35: Yur law-schl bkstre ffers t sell yu a cntracts textbk fr $100 and it prmises via a signed writing nt t revke this ffer fr ne week. Ten days later, yu stp by the bkstre t accept the ffer. Can yu still accept?, as lng as a reasnable amunt f time has nt squashed the caterpillar. The firm ffer has expired and the bkstre may nw revke the ffer. Hwever, there is n indicatin that the bkstre has revked the ffer. The default questin is whether a reasnable amunt f time has passed (see Example 29). MBE Cntracts and Sales 2017 Themis Bar Review, LLC 7

8 3. Offeree has started perfrmance A unilateral ffer t cntract cannt be revked by the fferr if the fferee has started perfrmance. What is a unilateral cntract? This arises frm a prmise that requests acceptance by an f the prmisee (versus a return prmise f the prmisee, which is called a "bilateral cntract"). See Example 12, abve. Example 36: "I prmise t pay yu $1,000 if yu prmise t paint my huse." Unilateral r bilateral? Example 37: "I prmise t pay yu $1,000 if yu paint my huse." Unilateral r bilateral? Because a unilateral cntract can be accepted nly by perfrmance, the law gives the prmisee the right t finish. Example 38: I prmise $10,000 t the winner f a swim race t Alcatraz Island. The swimmers dive ff the dck and are ging strng tward the island. When they're abut halfway, I stand up n Fisherman's Wharf with my bullhrn and yell "I REVOKE!" Can the winner f the race insist n the prize? this is a unilateral cntract with part perfrmance. Nte 7: The fferee need nt cmplete the perfrmance and can stp at any time. Example 39: Yu are swimming in the Alcatraz race, but yu get tired and swim t a bat. Can I sue yu fr breach f cntract? N; there's n agreement. 4. Detrimental Reliance An ffer cannt be revked if the fferee reasnably and detrimentally relies n the ffer in a freseeable manner. Lk especially fr a general cntractr/subcntractr cntext. This is a special variant f the reliance thery f cntractual liability (smetimes called "prmissry estppel") Example 40: A builder wh is bidding n a law-schl building prject receives an ffer frm a subcntractr t supply all f the carpet fr $20,000. Armed with this knwledge, the builder ffers t renvate the building fr $100,000. Befre the law schl accepts the bid, the subcntractr calls t revke its carpet ffer. Can the general cntractr builder still accept the carpet ffer frm the subcntractr? Themis Bar Review, LLC MBE Cntracts and Sales

9 ACCEPTANCE, INCLUDING THE MAILBOX RULE A. Acceptance An acceptance is a manifestatin f a willingness t enter int the agreement by the fferee. 1. Acceptance is gverned by the test. The starting place here is a famus phrase: "The fferr is master f the ffer." This means that the fferee must accept the ffer accrding t the rules f the ffer. Example 41: I ffer t sell yu my Jeep fr $50 and state that in rder t accept this ffer, yu must spring int a handstand, walk acrss the rm t me, and sign this piece f paper. Yu lk at me funny, just stand there, and say "I accept." Is there a cntract? Unilateral versus bilateral ffers. As master f the ffer, the fferr gets t decide which type f ffer t make, and the fferee must play by thse rules. B. Other Acceptance Rules Example 42: "I prmise t pay yu $1,000 if, and nly when, yu paint my huse." Yu say "I accept." Is there a cntract? yu haven't dne what I said yu must d t accept. Example 43: Bb sends a letter t Sue, reading "please ship me 500 windshield-wiper blades next week fr $5 each." Sue mails back a letter saying "I accept." Unilateral r bilateral ffer? Unclear withut mre infrmatin. Is there a cntract?, under the mdern apprach. Example 44: Bb sends a letter t Sue, reading "please ship me 500 windshield-wiper blades by next week fr $5 each." Sue ships 500 wiper blades the next day. Is there a cntract? Nte 8: **TRICK**What if the seller tries t accept by shipping the wrng gds? The UCC treats this as acceptance plus breach. Example 45: Bb sends a letter t Sue, reading "please ship me 500 Bsch windshield-wiper blades by next week fr $5 each." Sue ships 500 Slshed wiper blades the next day. Is there a cntract? but als a breach. 1. The ffer must be t the persn trying t accept it Yu can't accept an ffer directed elsewhere. See Example 11, abve. 2. Even with an pen-t-all ffer, yu must knw abut that ffer in rder t accept it. Example 46: I've lst my pet cat, Mnster, and I take ut a newspaper advertisement prmising $100 t anyne wh finds my cat by this Friday. Yu never see the ad, but yu find Mnster raming near my huse and return the MBE Cntracts and Sales 2017 Themis Bar Review, LLC 9

10 cat t me. Later, yu learn abut the reward ffer and cme by t cllect. D we have a cntractual agreement? 3. Yu must cmmunicate yur acceptance t the ther party in rder fr it t becme effective. Example 47: Yu ffer t buy my cntracts textbk fr $50. I say "I'll think abut it." That night, while I'm alne brushing my teeth, I say t myself "that's a gd ffer I shuld really accept that ffer... in fact, I d accept that ffer right nw I accept!" The next mrning yu call me up and revke the ffer. Is there a cntract? This requirement f cmmunicatin can smetimes raise tricky timing issues. This is the subject f the rule. 4. Mailbx rule Recall the general ratinale behind the mailbx rule: t determine when an acceptance has been legally cmmunicated when there is sme delay between sending and receiving. The rule: An acceptance sent by mail is valid when the letter is Des nt apply: If the fferee sends smething else first (e.g., rejectin, cunterffer). T ther types f cmmunicatin (e.g., revcatins, rejectins). T cntracts. It is unclear whether this applies t ther media (fax, , etc.). Example 48: I send yu an ffer. Yu mail back yur acceptance. I call yu befre I receive yur letter and revke. Is there a cntract? Example 49: I send yu an ffer. Yu mail back yur acceptance. The letter gets lst and never shws up. Is there a cntract?. Example 50: I send yu an ffer. Yu mail back yur acceptance. Yu change yur mind and call me up befre I receive yur letter t reject the ffer. Is there a cntract? unless I detrimentally relied n the rejectin. Example 51: I send yu an ffer. Yu mail back a rejectin. Yu change yur mind and mail back an acceptance a few hurs later. Bth letters arrive at my huse n the same day. Is there a cntract? It depends n 5. Acceptance withut cmmunicatin (by silence) There are sme exceptins t the requirement that yu must cmmunicate an acceptance t the fferr. Lk fr ne f the fllwing: Unilateral ffers r cntests (e.g., the Carblic Smke Ball case) Themis Bar Review, LLC MBE Cntracts and Sales

11 Unilateral ffers in which the parties are gegraphically clse (such that the fferr will see that perfrmance has ccurred) A f silence serving as acceptance (such that the fferee shuld reasnably ntify the fferr if she des nt accept) The fferr says that acceptance must cme via silence, and the fferee intends t accept the ffer by silence Example 52: I've lst my pet cat, Mnster, and I take ut a newspaper advertisement prmising $100 t anyne wh finds my cat by this Friday. Yu see the ad, find Mnster, and cme by my huse n Thursday t cllect the reward. Can yu get the mney even thugh yu never cmmunicated yur acceptance t me? Example 53: Mickey buys her weekly keg f beer by calling up Pabst Blue Ribbn n Mnday and leaving a message requesting delivery n Friday. One Mnday, she leaves her message as usual, but Pabst des nt deliver the keg that Friday. Distraught, Mickey asks if she has a cntract fr this keg. Des she? Example 54: I ffer t sell yu my Jeep fr $500,000, saying "yu may accept this ffer by remaining silent fr five secnds." Yu stare at me but dn't say a wrd. After five secnds pass, d we have a cntract? unless yu intend t accept. 6. Implied-in-fact cntracts Yu can cmmunicate an acceptance withut writing r speaking. This cmmunicatin by gestures r actins is called an "implied-in-fact" cntract. Example 55: I walk int Cheapcuts, a ppular haircut franchise where the service fferings and prices are psted abve the cash register. The energetic receptinist ffers t put my name in, and I sit dwn t wait. A haircutter cmes frward t call my name; I fllw and she cuts my hair. When I walk tward the exit, the receptinist tells me that I we them $15. Must I pay even thugh I never said a single wrd? A. Cunterffer COUNTEROFFERS AND UCC The cmmn law universe uses the rule. The terms in the acceptance must match the terms f the ffer exactly r it is nt an acceptance, but a cunterffer. MBE Cntracts and Sales 2017 Themis Bar Review, LLC 11

12 Treat cnditinal acceptance as just anther frm f cunterffer. (Lk fr wrds like "if," "nly if," "n the cnditin that," "but," etc.) Example 56: I ffer t mw yur lawn n Saturday fr $50. Yu say, "OK, if yu cme ver n Sunday." D we have a cntract? B. UCC The UCC is mre frgiving fr acceptances that dn't match the terms f the ffer exactly. It replaces the mirrr image rule with The main intuitin f is that a purprted acceptance that des nt match the terms f the ffer exactly can still cunt as a legal acceptance in many circumstances. But just because there's been an acceptance, d nt assume that all terms in the purprted acceptance will gvern the cntract. Nte 9: It des nt matter whether the parties are merchants fr this part f Example 57: I run a business n the side: Geis's Chainsaws. Yu send me a purchase rder requesting a chainsaw fr $400. On the back f this frm is an indemnificatin prvisin saying "seller agrees t indemnify buyer in the event f a lawsuit." I send back a cnfirming mem that is exactly the same as the purchase rder, except fr a prvisin n the back saying "buyer agrees t indemnify seller in the event f a lawsuit." The mst likely utcme - we dn't ever ntice the difference, because nbdy ever gets hurt. But it is pssible that a dispute arises and ne f us tries t back ut f the deal. Is there a cntract and, if s, which indemnity term, if any, cntrls. Text f 2-207(1): "A definite and seasnable expressin f acceptance [r a written cnfirmatin] which is sent within a reasnable time perates as an acceptance even thugh it states terms additinal t r different frm thse ffered r agreed upn, unless acceptance is expressly made cnditinal upn assent t the additinal r different terms." Example 58: Yu send a purchase rder requesting acceptance by this Friday. I send back my cnfirming mem tw weeks later. Is there a cntract? because the purprted acceptance is nt timely. Example 59: Yu send a purchase rder. I send back a timely cnfirming mem saying "Thanks, but I n lnger sell chainsaws; hwever, I have a hand saw which yu can have n the same terms." Is there a cntract?, because this is nt a definite acceptance f the riginal ffer. Example 60: Yu send a purchase rder. I send back a timely cnfirming mem saying "OK, n the cnditin that yu agree t indemnify me against a lawsuit fr harm arising frm the chainsaw." D we have a cntract? Themis Bar Review, LLC MBE Cntracts and Sales

13 Example 61: Same facts as Example 60, but my acceptance letter has a bunch f terms n the back, all f which match yurs, except fr a clause that says "Buyer agrees t indemnify seller against a lawsuit fr harm arising frm the chainsaw." D we have a cntract?, under 2-207(1). Unlike #60, in #61 the change was nt a majr part f the agreement; it was just ne term that was changed. The new term in the purprted acceptance may cntrl under 2-207(2), but nly if all f the fllwing are true: Bth parties are merchants; The new term des nt materially alter the deal; The initial ffer did nt expressly limit acceptance t its terms; and The fferr des nt bject within a reasnable time t the new term. It is very difficult fr the new terms in the acceptance t gvern the cntract. Example 62: Same facts as Example 61. Is my indemnity term part f the cntract? Example 63: Des the answer change if the buyer is Lwes? if the indemnificatin is If there is nt a real cntract but the parties still act as if there is an agreement (fr example, by exchanging gds fr mney), nly the terms that bth writings agree n becme part f the cntract, with ther terms supplied by the UCC acting as default rules. UCC als gverns the situatin in which tw parties have a cntract (ften a verbal agreement), and ne party sends ver a cnfirming mem with additinal terms that g further than the earlier agreement. D these terms cme in? 2-207(1): [A definite and seasnable expressin f acceptance r] a written cnfirmatin which is sent within a reasnable time perates as an acceptance [even thugh it states terms additinal t r different frm thse ffered r agreed upn, unless acceptance is expressly made cnditinal upn assent t the additinal r different terms.] Nte 10: If yu see this fact pattern (early agreement + written cnfirmatin with new terms), wrk thrugh the same steps as abve fr 2-207(2). But recgnize that the new terms will very rarely cme in. Editr's Nte 2: Althugh Prfessr Geis states that yu shuldn t have t wrry abut the knck-ut rule, there is a chance that it may appear n the bar exam. The knckut rule applies when the ffer and acceptance cntain cnflicting terms. See the MBE Cntracts and Sales utline fr mre details. MBE Cntracts and Sales 2017 Themis Bar Review, LLC 13

14 CONSIDERATION, INCLUDING MODIFICATION AND PREEXISTING DUTY RULE A. Cnsideratin (And Related Theries) - The "C" in "All Cntracts Dn't Stink." 1. General Nature f Bargained-Fr Cnsideratin Cnsideratin in the law means a deal in which the parties exchange prmises invlving a legal Exam Tip 2: The bar examiners like t test situatins in which bargained-fr cnsideratin is missing. Yu can quickly determine whether there is a prblem here by asking the fllwing questins: Wh is making the that needs t be supprted by law? (That persn is the prmisr; the ther party is the prmisee.) Is there a t the prmisr r a t the prmisee? (Yu need just ne, nt bth.) [Nte: Mst curts find cnsideratin if there is a detriment t the prmisee, regardless f whether there was a benefit t the prmisr.] Was this? (In ther wrds, did the parties think that they were making a deal when they exchanged prmises?) Example 64: I prmise t pay yu $1,000 if yu dn't watch the next seasn f The Bachelr. Yu d nt watch the shw, but I refuse t pay yu the mney. Wh is the prmisr? Prfessr Geis. Wh is the prmisee? Yu. Did I benefit frm the exchange f prmises? Nt in a legal sense. Did yu incur a legal detriment, even thugh nt watching the shw is gd fr yu? Is there bargained-fr cnsideratin? Nte 11: Key Nt ding smething that yu are legally entitled t d is a legal detriment. Gift prmises and cnditinal gifts d nt cunt as bargained-fr cnsideratin. Example 65: Every year fr Christmas, Mickey gives me a tacky tie, and I give her an ugly sweater. Can she sue me this year if I refuse t give her a present? we are exchanging gifts, nt bargaining. Example 66: I prmise t give yu my Jeep if yu cme t my huse t pick it up. Is there bargained-fr cnsideratin? I am nt bargaining fr yu t cme. Example 66 is a cnditinal gift (I wuld never sue yu if yu dn't cme ver). 2. Tricks Regarding Cnsideratin Adequacy f cnsideratin (nminal cnsideratin): A pretense f cnsideratin is insufficient; there must be sme adequacy f cnsideratin. Example 67: I prmise t sell yu my Jeep fr $1. Is there bargained-fr cnsideratin?, ne dllar is inadequate Themis Bar Review, LLC MBE Cntracts and Sales

15 Nte 12: Any difference in ecnmic value between the items exchanged is nt grunds fr finding that a cntract did nt exist due t inadequate cnsideratin. As lng as the exchanged item has subjective value t the persn receiving it, cnsideratin will be adequate. An illusry prmise: A prmisr must clearly cmmit t the deal r there is n cnsideratin. Example 68: Yu prmise t buy my Jeep fr $5,000 n December 1, "if yu feel like it." Is there bargained-fr cnsideratin? There must be a way fr the prmisr t breach. Lk fr situatins where ne side is nt really cmmitting t the deal under the bjective test. Lk fr language like: I wuld like t buy yur car when I have mre mney. r When the ecnmy gets better, I will pay $5,000 fr yur car. Satisfactin cntracts are nt illusry. They are real cntracts with cnsideratin. Example 69: I prmise t pay Mickey $500 if she paints a prtrait f my family that meets my satisfactin. She says OK. Is there bargained-fr cnsideratin? Output and requirements cntracts (see Example 18, abve) are nt illusry prmises There is a way fr a party t breach (by requiring the prduct and purchasing frm thers r by making the prduct and selling t thers). Past cnsideratin is nt cnsideratin. Example 70: Yu are trying t win a race t Alcatraz, when the sharks start t circle. I swing my bat ver t pick yu up. Grateful, yu prmise t pay me $500 fr the rescue. Is there bargained-fr cnsideratin? N. Prmising nt t sue Editr's Nte 3: Prmising nt t bring a claim, even ne that later prves t be invalid, can serve as cnsideratin if (i) the party agreeing nt t bring the claim believes in gd faith that it may valid, r (ii) there is a reasn t dubt the validity f the claim due t uncertainty f facts r law. B. Cntract Mdificatin and the Preexisting Duty Rule 1. Cmmn Law Cmmn law has histrically fllwed the preexisting duty rule, which means that a prmise t d smething that yu are already legally bligated t d (by prir cntract r therwise) is nt cnsideratin. Example 71: Yu rent an apartment frm Slumlrd fr ne year; the rent is $2,000 per mnth. Later that year, yu start running shrt n cash, and yu MBE Cntracts and Sales 2017 Themis Bar Review, LLC 15

16 bth agree t mdify the rent t $1,500 per mnth. Can Slumlrd sue yu at the end f that mnth fr the extra $500?, at cmmn law. (There is n bargained-fr cnsideratin fr the mdificatin cntract.) Exceptins include a change in perfrmance, a third party prmising t pay, r unfreseen difficulties that wuld excuse perfrmance. Example 72: Same facts as Example 71, except yu agree t re-rent the apartment fr anther year when the rent is lwered t $1,500 per mnth. Can Slumlrd sue yu at the end f that mnth fr the extra $500? N. Example 73: Same facts as Example 71, except Slumlrd's sister (Slumlady) agrees t cver $500 f yur mnthly rent if yu stay in the apartment. Is there bargained-fr cnsideratin? Yes. Is prmising partial payment fr release frm a debt bligatin binding? The key is t ask whether the debt is currently due and. If s, the mdificatin is nt binding. Example 74: Mickey wes me $50,000, due tday. I prmise t release her frm this debt if she can pay me at least $1,000. If she des, can I sue her fr the ther $49,000?, because the mdificatin is nt valid. Example 75: Same facts as Example 74, except that the debt is nt due until next year. If Mickey accepts the deal and pays me the $1,000 tday, can I sue her next year fr the ther $49,000? because the debt is nt currently due. 2. Mdificatin under the UCC The UCC universe des nt fllw the preexisting duty rule. Rather, yu shuld simply ask whether a mdificatin is made in. If s, it is binding even new cnsideratin. Example 76: Mickey cntracts with Pabst Blue Ribbn t buy her weekly keg f beer fr $75. Later in the week, Pabst calls back t say that there is a wrker shrtage that week, and it can't get her the beer unless she pays $100 (s Pabst can utsurce delivery t FedEx). Mickey says, "OK, charge what yu must; I need my beer." Is the price mdificatin binding? Example 77: Same facts as Example 76, but Pabst knws that Mickey will d anything fr her beer. On Friday mrning, Pabst calls t say, "yu better pay us $1,000 r we wn't deliver yur keg this afternn." Mickey says, "OK, charge what yu must." Is the price mdificatin binding? Themis Bar Review, LLC MBE Cntracts and Sales

17 CONSIDERATION SUBSTITUTES A. Other Theries f Prmissry Liability (Cnsideratin Substitutes) 1. Prmissry Estppel (r Reliance) Reliance can arise when ne party makes a prmise, and the ther party relies n that prmise t take sme actin. Three key elements fr a claim under reliance: A prmise is made that wuld be t induce reliance; The prmisee des indeed take detrimental actin in reliance n the prmise; and can be avided nly by enfrcement f the prmise. Example 78: Grandpa Mneybags prmises t pay his granddaughter Katie $100,000 next mnth s that she desn't have t wrk anymre. Katie quits her jb. Is this bargained-fr cnsideratin? N. Des Grandpa nevertheless have t keep his prmise? Maybe yes, under a reliance thery. Nte 13: Charities d nt need t prve detrimental reliance when pursuing a reliance thery t cllect n a charitable-gift prmise. Remember als that reliance was discussed earlier with respect t irrevcable ffers in the general cntractr/subcntractr cntext, as a special type f caterpillar "pwer shield." 2. Quasi-Cntract Quasi-cntract is smetimes called a "cntract implied-in-law." Think f this as a situatin in which yu wuld have made a cntract if yu culd have, but yu culdn't. Or, lk fr a situatin in which ne party cnferred a benefit n anther party, and it wuld be fair t pay fr that benefit. Quasi-cntract elements: The plaintiff cnfers a n the defendant; The plaintiff reasnably expected t get paid; and It wuld be unfair t let the defendant keep the benefit withut paying (lk fr an pprtunity t decline r a gd reasn why there was n pprtunity t decline). Example 79: I am teaching away fr this bar review curse, when I suddenly grab my chest and keel ver with a heart attack. A student rushes ut t hire a dctr, wh saves my life. Later, that student asks me t pay her back fr the dctr's fee. Must I? MBE Cntracts and Sales 2017 Themis Bar Review, LLC 17

18 Example 80: I hear abut this cl thing called quasi-cntract and rush ver t paint yur huse while yu are taking the bar exam. When yu cme hme, I stick ut my hand and demand a reasnable payment fr the paint jb. Will I recver? Nte 14: Quasi-cntract damages are ften limited, as justice requires, t the fair value f the benefit cnferred. Mre generally, whenever yu see a situatin that des nt satisfy the nrmal requirements fr a cntract but still strikes yu as unfair, ask whether quasi-cntract might apply. 3. Mral Obligatin Plus Subsequent Prmise (the "Half Thery") A few jurisdictins have sme case law suggesting that a mral bligatin plus a subsequent prmise t pay can be binding. Nrmally, this wuld be past cnsideratin and thus nnbinding. Example 81: Recall the facts f Example 70. Yu are trying t win a race t Alcatraz, when the sharks start t circle. I swing my bat ver t pick yu up. Grateful, yu prmise t pay me $500 fr the rescue. Is there bargained-fr cnsideratin? Might I argue mral bligatin plus subsequent prmise? 4. The Seal Des a seal n a dcument act as a cnsideratin substitute in mst jurisdictins? DEFENSES PART 1: MISUNDERSTANDING, INCAPACITY, AND MISTAKE A. Defenses t Cntract Frmatin The "D" in "All Cntracts Dn't Stink." Seven Defenses: 1) Misunderstanding 2) Incapacity 3) Mistake 4) Fraud/Misrepresentatin/Nndisclsure 5) Duress 6) Illegality 7) Uncnscinability 1. Misunderstanding Lk fr situatins where each party attaches different meanings t the same wrds. T make ut a defense here, yu must shw that: Themis Bar Review, LLC MBE Cntracts and Sales

19 1) The parties use a that is pen t tw r mre reasnable interpretatins (s the bjective test cannt apply); 2) Each side attaches a different meaning t the term; and 3) Neither party knws, r shuld knw, f the cnfusin. Example 82: I verbally cntract t sell yu a bike fr "twelve fifty." Yu think I'm trying t unlad the bike by selling it fr $ I think yu recgnize that this is a rare editin bike and yu are willing t pay $1,250. D we have a cntract?. Example 83: Same facts as Example 82, except I knw that yu wuld never pay $1,250 fr the bike and must think the price is $ Is there a cntract?. Fr hw much? 2. Incapacity Wh lacks the capacity t make a cntract? Minrs (under the age f 18) Peple wh are mentally ill tw standards: The persn cannt understand the nature and cnsequences f his actins; r The persn cannt act in a in relatin t the transactin (if the ther side knws this) Very intxicated persns (if the ther side knws this) The standard changes accrding t the type f incapacity. Minrs = blanket prtectin Intxicated persns = depends n what the ther side knws r shuld knw at the time Mentally ill = intermediate level f prtectin What happens if yu make a cntract with a persn wh lacks capacity? The cntract is meaning that the incapacitated party can disaffirm Fr necessities, the party withut capacity must still pay (nt necessarily the cntract price) What's a necessity? Smething yu really need t live, like fd, clthing, r shelter A party withut capacity can ratify the deal by keeping the benefits f the cntract after capacity is btained. MBE Cntracts and Sales 2017 Themis Bar Review, LLC 19

20 Example 84: Amelia is aged 16 but lks much lder. She buys a used airplane fr $5,000. The wings fall ff as she pulls away frm the dealer's lt. Can Amelia get her mney back? Yes. Example 85: Same facts as Example 84, except the plane flies OK. Amelia turns 18 and cntinues t use the plane. Can she get her mney back nw? N. Example 86: Same facts as Example 84, except Amelia is nw 32 and takes LSD prir t buying the plane. She has n idea what she is ding, but witnesses say she seemed perfectly lucid while negtiating and buying the plane. Can Amelia get her mney back? N. 3. Mistake A mistake is a belief that is nt in accrd with a fact. Example 87: Mickey cntracts with her stckbrker t buy a share f Ggle stck fr $500. When the price drps t $400 the fllwing mnth, can she get ut f the deal by saying, "I made a mistake; I thught the price was ging t g up?" Mutual mistake (affecting bth parties) lets the adversely affected party rescind if: There is a mistake f fact, existing at the time that the deal is made; The mistake relates t a assumptin f the cntract and has a material impact n the deal; and The impacted party did nt f mistake. Example 88: We are walking alng a trail, when I lean dwn t pick up a shiny rck. "Ww," I say, "lk at that diamnd. I'll sell it t yu fr $10,000." Yu agree and pay me the mney but are sad t learn later that the rck is plain quartz. Can yu get ut f the cntract?, fr mutual mistake. Example 89: Same facts as Example 88, except I say "Ww lk at that shiny rck; I wnder what it is. Well, whatever it is, I'll sell it t yu fr $10,000." Can yu get ut f the cntract? this is a "cmprmise f cnscius ignrance." mistake (ne party) lets the adversely affected party rescind if: She can prve all f the elements f mutual mistake; plus The mistake wuld make the cntract uncnscinable; r The ther side knew f, had reasn t knw f, r caused the mistake. Example 90: Mickey decides t mve t an annual purchasing mdel fr her beer kegs and slicits 25 brewers fr ffers. Twenty-fur f the brewers qute her prices in the $100,000 t $120,000 range. But ne brewer makes a mistake Themis Bar Review, LLC MBE Cntracts and Sales

21 abut the quantity f kegs she lists and qutes a price f $10,000 fr the year's supply. Can Mickey snap up the last deal? Nte 15: Only the adversely affected party can claim the defense. DEFENSES PART 2: FRAUD, DURESS, ILLEGALITY, AND UNCONSCIONABILITY A. Defenses t Cntract Frmatin, Cntinued 4. Fraud, Misrepresentatin, and Nndisclsure A misrepresentatin is a statement at the time f cntracting that is nt true. It can be intentinal (fraudulent) r accidental. T assert this defense, the party must shw: A misrepresentatin f a (nt pinin); That is r fraudulent (intentinal); and That is made under circumstances in which it is justifiable t n the misrepresentatin. Example 91: Befre buying my Jeep Wrangler fr $3,000, yu ask me hw the car runs. I say "it's a great car." In actuality, it nly runs n fur ut f six cylinders, and the radiatr leaks. Can yu get ut f the cntract?, if this is an pinin. Example 92: Same facts as Example 91, except yu ask me if the car runs OK, and I say "yes," knwing that it has all the mentined prblems. Can yu get ut f the cntract?, due t intentinal fraud. Example 93: Same facts as Example 92, except I dn't knw abut these prblems. Can yu get ut f the cntract?, due t material misrepresentatin. Example 94: Same facts as Example 93, except the nly thing wrng with the car is that the cigarette lighter desn't wrk. Can yu get ut f the cntract? Fraud in the Executin - Fraud in the executin is when yu trick smene int signing smething that she desn't even knw is a cntract. Example 95: Yu're walking dwn the street when yu run int Dave Matthews. Yu ask fr his autgraph and then laugh when he hands back the paper. If yu shw that he just signed a cntract prmising t play music at yur birthday party fr just a $100 fee, is Dave bund? N, this is fraud in the executin. MBE Cntracts and Sales 2017 Themis Bar Review, LLC 21

22 Nndisclsure The ther party desn't learn the truth abut smething, but nw yu just remain quiet. Nrmally, yu need nt tell the ther side abut all material facts related t the deal. But watch ut fr a special (fiduciary) relatinship r active Example 96: I'm selling my huse, but I have a bad termite prblem. I hide the ripples in the flr with carpets and put plants n the damaged stairways. Yu buy the huse but sn learn f the termite infestatin. Can yu get ut f the cntract fr nndisclsure? 5. Duress An imprper threat that deprives a party frm making a meaningful chice t cntract duress arises when ne party makes threats t induce anther party t cntract (r mdify a cntract). Example 97: Pabst threatens t breach a cntract with Mickey t sell her beer unless Mickey agrees t extend the cntract fr anther year at duble the price. Mickey has exhausted her credit with every ther brewer and feels that she has n chice but t accede t this threat. Is Mickey bund fr the next year? Undue influence arises when a party puts very intense sales pressure n anther party wh ften seems weak minded r susceptible t high-pressure sales tactics. 6. Illegality Illegal cntracts are unenfrceable. But, a cntract entered in furtherance f an illegal act (that is nt itself illegal) will still be enfrced. Example 98: Mbster Tny Spran agrees t pay Paulie $10,000 t knck ff Artie. Is this legally binding as a cntract?, because it is fr an illegal actin. If Paulie desn't knck ff Artie, then Tny cannt bring Paulie int curt and sue him fr breach. Example 99: Same facts as Example 98. Paulie hires a taxi t drive him ver t Artie's restaurant. Can Paulie claim an illegality defense t avid paying the cab driver? Typically, the law will just leave the parties where they stand, but there is a mdern trend tward allwing less-guilty parties t recver restitutin (i.e., get their mney back). Example 100: Same facts as Example 99, except Tny pays Paulie the $10,000 up frnt. If Paulie refuses t perfrm, can Tny get the mney back? The lsses will lie where they may Themis Bar Review, LLC MBE Cntracts and Sales

23 Cntracts against public plicy will nt be enfrced. These are cntracting situatins that are nt frmally illegal but present sme ther plicy cncern (e.g., a brad exculpatry agreement). 7. Uncnscinability This is the ultimate cntract defense. Everything seems fine, but a curt simply lks at the deal and says, "N, this shcks my cnscience. It's uncnscinable." Recall the tw varieties f uncnscinability: uncnscinability: A defect in the bargaining prcess itself, such as a hidden term (surprise) r an absence f meaningful chice (n ther cntracting ptin); uncnscinability: A rip-ff in sme term f the cntract. Sme jurisdictins require bth varieties t be present befre a deal is stuck dwn; thers may act if nly ne variety is present. Example: When yu started law schl, yu signed a license t use Westlaw prducts. Buried n page 110 f a 235-page cntract is a clause in which yu agree t pay 25% f yur salary fr the first 5 years after yu graduate law schl. STATUTE OF FRAUDS PART 1 A. Statute f Frauds - The "S" in "All Cntracts Dn't Stink." The Statute f Frauds (SOF) is a barrier that sme cntracts must meet in rder t becme "real" (legally binding). The basic gal f the Statute f Frauds is t prevent false assertins abut a cntract that was never really created. Example 101: I walk up t yu ne day and say "I'm s glad that yu agreed t sell me yur huse fr just $50,000." Yu stare at me puzzled and reply, "Wh are yu? We've never met." I laugh and say, "See yu in curt." Will I win the lawsuit? ; the Statute f Frauds will bar my claim. Yu shuld always ask tw questins here: 1) Gateway questin: Des the Statute f Frauds apply t this transactin? Are we in SOF wrld? 2) If s, has the Statute f Frauds been satisfied? Cntracts in SOF wrld require a higher and special frm f prf typically a writing signed by the defendant r sme perfrmance n the purprted deal. MBE Cntracts and Sales 2017 Themis Bar Review, LLC 23

24 1. Is the cntract in the Statute f Frauds wrld? Recall that the Statute f Frauds applies t nly a few types f cntracts: Marriage: A cntract made in cnsideratin f marriage (like a prenup). Suretyship: A cntract prmising t guarantee the debt f anther. One Year: A cntract that by its terms cannt be perfrmed within ne year frm its making. UCC: Applies t gds cntracts fr a price f $500 r mre Real prperty: A cntract fr the sale f an interest in real prperty. Yu shuld think abut Lemnheads candy and its masct: Mr. SOUR (r M. SOUR): Example 102: Mickey buys beer n credit frm Pabst, prmising t pay $499 at the end f the mnth fr her five kegs. Pabst sues her at the end f the mnth fr failure t pay. Are we in Statute f Frauds wrld? Example 103: Same facts as Example 102, except Pabst nw sues me, claiming that I had ffered t pay Mickey's bill if she culd nt. Are we in Statute f Frauds wrld?, suretyship. The Main Purpse Exceptin If the main purpse in agreeing t pay the debt f anther is fr the surety's wn ecnmic advantage, then we are nt in Statute f Frauds wrld. Example 104: Same facts as Example 103, except Pabst sells beer t Mickey that she brings ver t my huse fr weekly parties. Pabst sues me, claiming that I had ffered t pay Mickey's bill if she culd nt. Are we in Statute f Frauds wrld?, because f the main purpse exceptin. The ne-year rule is interpreted very narrwly; the questin is whether there is that the cntract culd be perfrmed within ne year. Example 105: I verbally cntract with the mayr f Charlttesville t build an exact replica f the Egyptian pyramids at the edge f twn fr $50 billin. Are we in Statute f Frauds wrld? It may be difficult, but it is nt impssible t cmplete the cntract within ne year. Example 106: I verbally cntract with the mayr f Charlttesville t manage all city electins thrugh 2028 fr $50 per electin. Are we in Statute f Frauds wrld? Example 107: I cntract n April 1 t hire a 1L student as my RA fr three mnths during her 2L summer. Are we in Statute f Frauds wrld? The length f the emplyment is nly three mnths, but it wn't even start until after ne year frm nw Themis Bar Review, LLC MBE Cntracts and Sales

25 Example 108: Luke Skywalker hires me t teach him cntract law fr the rest f his life. Are we in Statute f Frauds wrld? It is pssible that Skywalker culd die within ne year. Nte 16: All cntracts invlving real prperty are nt in Statute f Frauds wrld; nly thse transferring an interest in the prperty. Als, leases f less than ne year are usually nt in Statute f Frauds wrld. Example 109: Skywalker hires Chewbacca t build a huse n an acre that Skywalker wns n Endr. Is this cntract in Statute f Frauds wrld? It invlves land but des nt transfer an interest in land. Example 110: Skywalker agrees t sell his Endr acre t Chewbacca fr $5 millin. Is this cntract in Statute f Frauds wrld? Example 111: Mickey verbally cntracts with Pabst t buy exactly $500 in beer. Are we in Statute f Frauds wrld?, under the UCC part f the SOF. STATUTE OF FRAUDS PART 2 A. Has the Statute f Frauds been satisfied? There are tw main ways t satisfy the Statute f Frauds by and by. The exact requirements differ between ur parallel universes. 1. Service cntracts that cannt be perfrmed within ne year Full perfrmance f a services cntract that culd nt be perfrmed within ne year by either side satisfies the Statute f Frauds. Editr's Nte 4: Nte that under the Secnd Restatement, this rule nly applies t cntracts under the Statute f Frauds that culd nt be perfrmed within ne year. Example 112: Skywalker verbally agrees t hire Chewbacca t build a huse n his Endr prperty. In exchange, Skywalker will prvide "charm lessns" t Chewie fr the next three years. Is this cntract in Statute f Frauds wrld? Chewie builds the huse, but Skywalker refuses t prvide the lessns, asserting a Statute f Frauds defense. Is Skywalker right? Part perfrmance f such a cntract des nt satisfy the Statute f Frauds. 2. A writing signed by the party against whm the cntract is asserted D yu need bth signatures n the writing? Des the writing have t be a frmal cntract? But it must cver the fundamental facts by: Indicating that a cntract has been made; MBE Cntracts and Sales 2017 Themis Bar Review, LLC 25

26 3. Real Estate Identifying the parties; and Cntaining the essential elements f the deal. A signed writing will satisfy the Statute f Frauds. But, unlike ther service deals, part perfrmance f a real estate cntract can satisfy the Statute f Frauds if any tw f the fllwing three elements are met: 1) Pssessin 2) Payment 3) Imprvements Example 113: Chewbacca claims that Skywalker agreed t sell his Endr acre fr $5 millin. There is n signed writing, but Chewie nw pssesses the land and has erected a nice huse by the lake. Is this cntract in Statute f Frauds wrld?. Is the Statute f Frauds satisfied?. 4. Gds A signed writing will satisfy the Statute f Frauds, but the requirements differ a little under the UCC: There is n need t mentin the price; The writing must mentin the sld. The cntract is nly enfrceable under the Statute f Frauds fr the quantity mentined. Example 114: Mickey verbally cntracts with Pabst t buy 100 kegs f beer fr $75 each. Later, Pabst sends her a signed cnfirmatin rder stating that the parties agree t cntract fr 50 kegs f beer (n price is listed). Even later, Pabst asserts a Statute f Frauds defense and refuses t sell Mickey any beer. Can Mickey satisfy the Statute f Frauds? but nly fr 50 kegs. Part perfrmance n a gds cntract satisfies the Statute f Frauds, but nly fr the quantity delivered and accepted. Example 115: Same facts as Example 114, except there is n cnfirming mem. Mickey changes her mind and decides t rder sme kegs f Fat Tire beer. Later, Pabst delivers 25 kegs t Mickey, and she eagerly stres the kegs in her basement. Can Pabst satisfy the Statute f Frauds? Yes, but nly fr the 25 kegs delivered and accepted. Is Mickey cntractually bligated t buy the ther 75 kegs frm Pabst?, the Statute f Frauds will bar that claim. Custm-made (r specially manufactured) gds are exempted frm the Statute f Frauds Themis Bar Review, LLC MBE Cntracts and Sales